Lower-Cost Reform Bill Nears Passage in Tennessee

After turning back successive tax reform proposals offered by Gov.
Ned McWherter, Tennessee legislators last week were on the verge of
passing a scaled-down education-reform plan and ending the debate that
has preoccupied state leaders for the past two years.

Observers predicted narrow passage for the education bill and an
accompanying half-cent rise in the state sales tax that would generate
$230 million in the school-reform plan's first year. Lawmakers were
expected to consider the package late last week or early this week.

The sudden and unexpected financial revival of a school district
that had been widely reported as being on the brink of collapse,
however, has renewed public skepticism about the need for new education
funding. As a result, analysts late last week were terming the vote too
close to call in the House.

"Everything is very iffy," said Representative Eugene E. Davidsen,
the chairman of the House Education Committee.

Support had appeared to be building for the education-and-tax bill
after the end of a special session called in January by Mr.
McWherter.

The session ended with no action on the Governor's proposals. But in
the wake of lawmakers' refusal to back creation of the state's first
income tax, which would have generated $565 million for the school
plan, the lower priced option emerged.

The education plan was approved this month by a House-Senate
conference committee that had been considering it since July.

The reform plan closely resembles bills approved last year by the
House and Senate, but the reduced funding levels would put off full
implementation of many of its more costly provisions. Class-size
reductions, for example, would not be required until after the law's
new finance formula is fully funded.

The bill also sought to resolve a lingering dispute over the most
politically sensitive part of Governor McWherter's school-reform
plan-an end to the widespread practice in the state of electing local
school superintendents. Under the conference agreement, county
commissions would be allowed to vote to continue the elections through
1996. By the year 2000, however, all superintendents would have to be
appointed by local school boards.

An Embarrassing Recovery

But as lawmakers scurried to piece together a funding plan that
would aid strapped school districts while also providing some new money
for reform, growing tales of schools' desperation may have
backfired.

The focus of the controversy has been Hancock County, where school
officials had long warned that a shortage of cash would force them to
order a Feb. 14 shutdown without state help. In response, the
legislature approved a measure to provide emergency aid, while also
requiting state supervision of the district's finances.

The Hancock County commission turned down the offer, however,
announcing that it had found $80,000 within its own coffers to keep the
schools open for the rest if the year.

The surprise ending to the drama, which had drawn national
attention, left some legislators and many taxpayers with increased
doubts about the claims of financial woos that have come from many of
the state's poor districts in recent months.

"It has really clouded the issue," argued Mr. Davidson, who said
some lawmakers were alarmed when the long-suffering district shrugged
off its symptoms after being handed a last-minute cure.

"People see that this and other districts that have been able to
find additional monies," he added. "Now the calls are coming in telling
us to say no to increased taxes."

"The Last Option'

Acknowledging that Hancock County's speedy recuperation has made the
tax package a more difficult proposition, officials last week were
countering the development by pointing to signs that districts
throughout the state are, in fact, in a bind.

Aides to the Governor said last week that 30 districts have
exhausted their reserves this year to maintain their programs. Of the
$230 million the tax package would deliver, $116 million would go
simply to restore cuts that lawmakers have ordered during the past
year.

The remaining $114 million would be channeled into the education
bill's new funding formula aimed at equalizing school spending. A
chancery court judge last year struck down the state's school-finance
system and ordered lawmakers to approve a new plan by June. The state
has appealed the ruling, however.

Last week, as many educators and state leaders lobbied for the
reform bill, most conceded that the result was not what they had
envisioned.

"Certainly we do not like an increase in the sales tax, but if that
is the only means by which we can get an increase for next year, then
we will support it as the last option," said Ernestine G. McWherter,
the executive director of the Tennessee Organization of School
Superintendents.

The Governor shares many of the same sentiments, according to his
press secretary. "[Mr. McWherter] really is not enthused about the
method of funding, but he sees the need to restore the cuts that have
been made and make some progress," Ken Renner said.

And, although they were not certain last week that the education
plan would pass, many of those involved in the issue expressed relief
that the education-reform debate may be nearing an end.

"The philosophical debate of should we do this or not is now over,"
said Brad Hurley, the executive assistant to Commissioner of Education
Charles E. Smith. "Clearly, this would be a first step, and we think it
is a good first step considering the circumstances."

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